Exam 21: Flexible Budgets and Performance Analysis

Bianca Publishing has a number of investment centers to track on a day-to-day basis.The following represent key figures related to one of Bianca's investment centers for February 2014: What is the investment center's ROI for February 2014 (rounded percentage answer to two decimal places)?

Variable costing allows a manager to classify controllable costs as

An organization chart assists in management control.

What is the business purpose of the balanced scorecard,and how does it benefit an organization?

Performance reports should include

A performance management and evaluation system is mainly utilized to account for and report on financial performance.

Which of the following determines a company's competitive advantage by comparing its performance with that of its closest competitors?

For residual income figures to be comparable on a companywide basis,all investment centers must have equal access to resources and similar asset investment bases.

Identify and describe the five different responsibility centers,and provide one example of each.

Which of the following is a common assumption in the balanced scorecard?

ROI is a performance measure,which uses information only from a company's income statement.

Determine the April 2014 residual income for an investment center with the following information:

A responsibility center in which the relationship between resources and products or services produced is not well defined is known as a(n)

Economic value added is synonymous with shareholder wealth created by an investment center.

How effective a performance management and evaluation system is depends on how well the goals of individual responsibility centers,the entire company,and managers are coordinated.

Why is it important that a manager's evaluation be based only on those revenues and costs that he or she can control?

Identify the following and show the formula for calculating each: a.ROI b.RI c.EVA

Which of the following statements is true of performance measurement?

Write a brief note on the performance-based pay.

Many organizations utilize responsibility accounting